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DOUBLE TAXATION OF SENIORS IS NEW CAUSE FOR AMAC

AMAC’s Founder, Dan Weber

BOHEMIA, NY, Apr 29, 2011 – The Association of Mature American Citizens says it is focused on a new cause—the double taxation of senior citizens.  Dan Weber, AMAC’s president, says it is “appalling” that many seniors on social security must pay income tax on their benefits and is calling on Congress to address the issue promptly.

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“The government is taxing their taxes, and that is just plain unfair” Weber notes in a new campaign calling on all seniors to join AMAC in its “demand that tax reformers on the Hill take a closer look at this particular, peculiar inequity in the law that decidedly targets older Americans.”

He gives as an example a person with a combined income of $38,000, (assuming $24,000 in Social Security income) would have half of his or her Social Security taxed. That person would fall into the 15% tax bracket resulting in $1,800 in extra tax on their Social Security income. In fact, when total combined income exceeds $44,000, 85% of the individual’s Social Security gets taxed, typically resulting in an extra tax of $3,000 or more. [See Social Security publication 915 to figure your combined income].

“These folks accumulated Social Security benefits in the first place by paying taxes and now the taxes they paid are being taxed.

AMAC has designated its Web site, www.amac.us, as the rallying point for its new cause and is asking “seniors and their families to visit and express their opinions and tell their own stories on this and other issues affecting them.”

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slackker
6 years ago

Here is the bill to fix this below. It has been introduced.

https://www.govtrack.us/congress/bills/114/hr589

slackker
6 years ago
Tired of Being Screwed
6 years ago

My husband has been on SS “Disability” starting at age 51 for the last 10 years making an average of $900 per month. I work and make over $32,000.00. Because we are married FILING JOINTLY, my income counts as his income!

Let’s flip this idea…..my income counts as his income in double taxing his SSD, why isn’t my SS paid in used to establish his monthly SSD income at a higher amount?

MY EARNINGS are UNDER MY SS# and should not be calculated as relative to his benefits. This double taxing on SS benefits is STEALING!! MY income tax return, earned under MY SS# is not my husband’s earnings! They say “file Married Separately”, well let’s see….I would pay a higher tax percentage to start off and my husband would not even file because he only has SSD to claim so HIS Standard Deduction and Exemption Allowance is unavailable to use. The IRS even went so far to tell me if we divorced on paper and lived together, my income would still count because it is “household income” that is used to calculate. So the roommate we had for two years (not related) would be included too?! Not likely!

WHERE and WHO can we write our complaints and send in?? If we all did it, at the least, it would annoy and irritate the system! Might even make a difference!! We may not be able to picket and protest as being done now in cities but the letters would have to be processed!

Arn
7 years ago

When did congress change the law on double taxation. When was it past and who voted for it?

sedwin
7 years ago
Reply to  Arn

This became law under the Reagan-Greenspan Tax Law of 1983. It was part of the “Supply Side” economic plan where the rich stopped paying their fair share and the poor picked up more of the slack. Of course even this amount didn’t make up the whole amount the rich no longer stopped paying which is why we have been a society of debt and deficit since Reagan (with the exception of the Clinton years when Clinton made the rich pay their fair share for those few years). Supply-side economics is nothing but a pyramid scheme for the wealthy. If we made the rich pay their share and we removed the ceiling of roughly $200,000 on social security taxable income, we could immediately remove these illegal double taxes.

Ted
8 years ago

Just wait until our fellow conservatives move us to the (un)FAIR Tax. It sounded great about 25 years ago, but my “59 1/2 Birthday” is less than two weeks away and I am scared to death that I’ll be paying tax AGAIN on the same money, this time when I spend it in retirement. Unless there is a phased-out refundable tax credit for retired persons (phased-out fully when those never subject to Federal income, Social Security and Medicare taxes reach retirement), it should not be endorsed by this organization. I hate to say it, but I may have to talk the Republican talk and vote the Democrat vote if that’s what it will take to spend, tax-free, my already-taxed Roth IRA and non-retirement savings!!!

Lou Wilson
9 years ago

My problem is that your income is taxed before Social Security is taken out. Then the Social Security is taxed as income when you get it back. This is dual taxation. Social Security itself is not a tax, but the income used to pay it should not be taxed at the front end, if we’re also paying tax on it in the back end.

Nancy
9 years ago

It is simple….my income was taxed when I was working and now because I worked my behind off for 32 years and get my retirement benefits I am having to pay taxes on 85% of my Social Security. I am not even working now, but get a monthly retirement benefit and because of this monthly retirement benefit I have to be taxed on my Social Security that I already paid taxes on when I was working. This burns me up. I was shocked to find out I would have to pay 1500 dollars this year in taxes. I am just furious. The government has money to send and spend in other countries, but they tax the senior citizens here in the USA. The government has money to bail out all these huge cooperations that didn’t handle their money correctly etc. but they tax the senior citizens. This will really drive you crazy if you think about it enough. I saw a news program on tv years ago on government spending. You would not believe what stupid things our tax money supports each and every year….grants, programs etc. I mean really stupid stuff that don’t amount to anything. I was so mad after watching that program, I wished I had never even turned it on. I know someone that taught school for 32 years and they received grants etc. to try out new programs that didn’t amount to a pile of beans. The teachers hated them because they were useless and added more and more paper work for them to do instead of teach….but they got thousands and thousands of dollars to do these programs….the money was used to bring in people to do this or the other and buy stupid materials to use to test etc. (as if our children aren’t tested enough)….this is just one example of what our tax money that they take from senior citizens is used for. I am so mad right now…I have to go and rest a bit to calm down.

Lawrence Coop
9 years ago

The IRS formula used to determine tax owed on Social Security income has not changed since it was first introduced and contains glaring examples of marriage penalties. In 1994 the amount subject to tax was increased from 50% to 85% and since that time Social Security COLAs have amounted to 44.3% with no indexing of the IRS formula. Maybe I should feel fortunate that our total income reguires us to pay Federal tax on 85% of SS income. The added 35% subject to tax resulted in an additionl tax liability of $1082.00 for tax year 2011.

Lauralie Campbell
10 years ago

In the latest edition of Amac Advantage, an article titled “Seniors Paying Double Tax on Social Security Income” suggests two specific proposals to remedy this wrong policy. While I applaud Amac for highlighting the unfairness of US tax policies against seniors, I am disappointed in Amac’s proposed alternatives. First, Amac encourages President Obama and Congress to remedy the situation through Tax Code changes to “take this tax burden off the middle class” and “go after the multi-millionaires and billionaires”. It is disappointing to hear Amac espouse what is essentially class warfare as a solution to any government created problem. Second, the Amac suggestion to create a ‘tax on the windfall profits received by the trial lawyers when they win a major lawsuit’ is doubly flawed. It ignores the fundamental need for tort reform in our flawed civil litigation system. Most importantly, it only fuels an already insatiable federal appetite for revenue via confiscation and redistribution of wealth, under the guise of ‘windfall profits’. How long might it be before this same government decrees the investment return on our IRAs to be ‘windfall profits’? I am disappointed that Amac has failed to use this issue as an opportunity to stand against the insane and unsustainable levels of federal spending and taxation that are destroying our economy and our wealth. I am also dismayed to hear Amac advocating for tax increases and spread-the-wealth schemes unlike those that are advocated by liberals and our government. I expect better from Amac.

Frank K
10 years ago

The tax on 50% of Social Security benefits was initiated by R Regan. It was increased to 85% by Clinton.
The problem is the basis of $25,000 for Single and $32000 for Married has not been increased for inflation sicne 1983.

Richard & Dorothy
10 years ago

Yes, the Dems did pass this law.
Yes, it is unfair.
Yes, it should be repealed.
Why would the Dems repeal a sacred cow ? (Taxes that pay for their social programs)
The time to attempt repeal is when Obama is out of office and the Senate is controled by more conservatives.
Above all, we should never advocate raising the taxes on any person, rich, lawyer or whatever for our own benefit. Sounds like an Obama non solution.

TallGal in GA
10 years ago

I paid tax on my income and then Social Security was taken out. I pay taxes on my retirement income, which includes that same Social Security money. If Obama’s debt cure includes another tax on Soc Sec, wouldn’t that be TRIPLE taxation?

edna fox
10 years ago

my dad died in 1978 of cancer. five days before he died he received a letter from s.s. admin. stating that he was “able” to work. he died and my mom fought to get his s.s. benefits to no avail. how sad is this? makes you wonder who got it.

edna fox
10 years ago

i had to pay taxes on my s.s. for 7 years because my husband was working and this put us in a higher tax bracket. he retired last year and we were told that we would not have to pay these s.s. taxes any longer. this is so unfair, the govt. wants your money any way they can get it. they should be made to pay us back,

John W. Rosenberger
10 years ago

I know all about it. I have been paying into SS ever since it started back about 1936. It’s the damned democrats that want our money. We have got to get rid of the goddamned democrats!!

Marc Arquilla
10 years ago

Thank you

Marc Arquilla
10 years ago

Good to read that many others agree.

Marc Arquilla
10 years ago

I have not joined AARP because I learned that they work against my beliefs. I agree with most all of the postings above and am sickened to learn that seniors and all American citizens are being screwed by most of our representatives. They talk a good talk about helping people, but it is they (the politicians) who get helped by their actions.
I have paid into the SS system since I was 14. I have been very sick for the last ten years and continued to go to work to support my family. The more I earned, the more I was penalized (taxed). Two years ago I had a kidney transplant. The transplant has kept me alive, but I can no longer work to support my family. I qualified for S.S. Disability and Medicare at the age of 60 (because of a law that entitles kidney dialysis or transplant patients). I have heard the word ENTITLEMENT from the politicians and other ignorant people. I am disgusted with that word and the thought that I paid into the SS system for 46 years, only to hear the word entitlement described as if I were a charity case or I was being supported by other hard working citizens.
Now there are those in our government that want to reduce the entitlements that I earned by working and paying into the system almost all my life.
Additionally, medicare benefits for kidney patients is only good for 36 months. My cobra which costs me $1350/month will expire soon also. The medical premiums not to mention the medical expenses that are not covered by Medicare or my Cobra insurance are killing me. When the insurance expires, my family will be without health insurance. The government offers 36 months of Medicare to kidney patients. What is the patient supposed to do after the 36 months is up……DIE for lack of money to pay these outrageous medical bills. My medicine alone costs over $4200/month plus doctor and hospital bills. My wife now works 20/7 to pay our bills. Her company does not offer health insurance. We will soon likely lose most everything we own.
I am an American citizen who worked in an industry that went “south” literally and figureatively as the American politicians basically gave my industry away to foreign nations.
When I hear that the government wants to tax my benefits that my wife and I already paid taxes on when we earned the benefits…and that the idiots in Congress say that I am getting an “entitlement” as if it were a dirty word and a gift from them…..and they want to reduce it or eliminate it….while at the same time they are using entitlements to lure illegals to vote for them….and at the same time even more illegals are being enticed to come to this great country of entitlements to receive entitlements that they did not earn……I am seriously disgusted.
We have three daughters who are in debt with college loans that will take a 20 years to pay off. One of my daughters just started working. She was in shock when she learned how much money was taken out of her check. All working Americans are. Our politicians spend our money like drunken sailors for wars and projects that make no or little sense. Most of them lack the courage to stand for what is Right, but they sure know how to stand for what is LEFT. They make rules and laws for everyone and even more special rules and laws FOR THEMSELVES GIVING THEMSELVES “ENTITLEMNETS” that they don’t earn or deserve.
Our country is in a Big Mess. We need to clean house…..that is House of Representatives and the Senate…and we need a President who believes in God and prayer. We need leaders who are God-fearing, honest and have knowledge of history and economics….History repeats itself and without knowledge of it, our leaders will lead us to hell.
Our leaders have already put a huge load on our children and their children for the next generations. We need to make big changes right away to turn things around. But let’s trim the budget by plugging the leaks that are really causing the problems in this country. Stop giving our future away by giving monies to other countries (especially countries that hate us and wish us evil), and spending on wars that we should not be involved in, to illegals, to the needless and frivilous pork that the politicians use to get votes. Make the politicians live and breathe by the same laws they make us live and breathe by. Stop penalizing people who go to work everyday and stop penalizing the entrepreneurs. Reward the American citizens with their due. Let’s make this the country that it was founded to be and let’s start governing our country according to the Constitution again. Get rid of czars and the liberal socialistic way of governing or they will get rid of the United States as we know it and love it.

Donald
10 years ago

As a recent retiree I was exposed to the Federal Senior Citizen Tax, which is an extra tax on Social Security and/or Railroad Retirement benefits. It causes your taxable income to increase by taxing up to 85% of your Social Security and/or Railroad Retirement Benefits. Before 1984, Social Security benefits were tax exempt, then after a Greenspan Commission report pointed out that Social Security finances needed bolstering, congress changed the rules so a portion of Retirement Income became taxable. The limit was on 50% of the Social Security Benefits for (married filing jointly) returns that had more than $32,000 income. The algorithm increases the taxable income which in turn increases the Federal Income Tax burden on existing SS beneficiaries. The extra money was to be designated (Earmarked) to the Social Security Trust Fund. Then in 1993 the limits was raised to 85% and the base amount was raised to $44,000. The increased revenue was to be designated (Earmarked) to the Medicare Trust Fund. Taxable income is compounded by adding up to 85% of your retirement income. For Example: A $1,000 increase in income could add as much as $1,850 to taxable income. The Senior Citizens Tax violates Article I, Section 8 of The Constitution of the United States of America. Section 8 requires that “..all Imposts and Excises shall be uniform throughout the United States.” A tax that eliminates Federal Government Workers and others that do not receive Social Security and/or Railroad Retirement Pension benefits is not uniform.

I live in Minnesota which has a state income tax, so when Federal Taxable Income increases it also increases Minnesota state taxes. As a Minnesota resident that continued working after retirement and paying additional SS Taxes the marginal tax rate could go as high as 48% (Federal, State & SS) even though you are in the Federal 15% Tax Bracket.

Prior to retirement Social Security tax rate is 6.2% and Medicare is 1.45% for employed workers and double that amount for self-employed workers. Senior Citizen Tax rate for Social security and Medicare for the Senior Citizen Tax is dependent on the tax bracket that the taxpayers are in. Taxpayers in the 15% bracket would pay 15/6.2 = 2.4 times the normal rate for Social Security and 15/1.45 = 10.3 times the normal rate for Medicare. Is this even legal to charge a higher rate for Social Security and Medicare

Joan Apodaka
10 years ago

At what point do we say enough is enough? Now they starve our seniors and continue to give to illegal interloping squatters? We have worked our butts off from Day One and were made to pay into the system. We have been suckers for decades; taxing from citizens to give to illegal invaders. The majority of whom believe that 30% of U.S. territory should be “returned” to Mexico. If we are not angry enough at this point to “walk like Egyptians” I wonder how much agony at the hand of tyranny WILL it take?

Rick 05
7 years ago
Reply to  Joan Apodaka

Hate to say it but you are wrong my friend. Illegals are not entitled to SS.One must have a valid SS number and work for 10 yrs. and or have 40 credits to qualify. So please get your facts straight before you rant.

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